Dear Mr. Tan,
How do I take account of inflation in financial planning? I am afraid that the money that I have saved and invested will be eaten up by inflation over the future years.
REPLY
I shall be posting a FAQ on this matter next week, after I return to Singapore (as I am now in Indonesia).
I will give some simple practical advice on how to deal with this matter.
You must have invested in the traditional insurance products like wholelife , endowment, regular and single premium. They are doomed to loss. If the future inflation goes up to 5% all your investments in this type of products will suffer loss in real value. To quote example of products like NTUC's that are doomed. They are growth policy, revosave, capital plus the endowment and the whole life.
ReplyDeleteYou should move out into the the unit trusts or ILPs. To enusre safety, invest in globally, broadly diversified portfolio .
Spend like there's no tomorrow, that will take care of inflation costs!
ReplyDeleteTell that to the insurance agents.They love you becuase that lowers the inflation for them at the expense of their clients.
ReplyDeleteYes, i have been telling them time & time again over e years! But they have not listened..too bad..happy spending..
ReplyDelete